LG Electronics is looking to buy up appliance Companies in an effort to expand their market growth.
The move follows the recent acquisition of US appliance Company GE by Chinese Company Haier.
Jo Seong-Jin, president of LG’s home appliance division said that he expects LG’s unit market share to grow by 10% this year as the Company chases growth in markets such as Australia, USA, Europe and Asia.
“The home appliance industry growth, including washers and refrigerators, is unlikely to show a significant expansion going forward,” Jo said. “The overall home appliance market is expected to grow about 2.5 to 3 percent by sales this year whereas our sales for premium sets alone will generate a whopping 10 to 15 percent growth.”
LG, like their larger rival Samsung Electronics who is currently defending a washing machine recall fall out in Australia, is trying to innovate and push into premium segments to capture more affluent consumers amid increased competition from Chinese rivals such as the Haier Electronics Group.
Shortly LG Australia will release a new range of Premium appliances in Australia, overseas this range is delivering growth for the Korean Company.
The Company that known for their innovation in the appliance market LG released its Twin Wash machine in July last year, enabling users to do two loads of laundry at the same time.
Seoul-based LG is also considering an expansion of its production footprint, which already includes plants in 11 countries from South Korea and China to Turkey and Mexico.
The company is also looking to increase its investment in Vietnam which is a major supplier to the Australian market, they also and haven’t ruled out establishing factories elsewhere in the world, Jo said.
LG posted operating profit of US$431 million on sales of 13.4 trillion won in the three months ended March, the company said in April. Home appliance earnings surged 78 percent to 407.8 billion won in the quarter.
Midea, China’s biggest maker of home appliances, agreed in March to buy a majority stake in the struggling Toshiba appliance unit. ChannelNews understands that the brand will be released in Australia next year via a major retailer.
Haier agreed in January to buy General Electric Co.’s appliance division for $5.4 billion last with GE products made by Haier set to be released in Australia next year.
Another problem that appliance manufacturers are facing is the emergence of Aldi as a major retailer of house brand appliances.
Currently several chains are talking to distributors such as Tempo with a view to expanding both their large and small appliance ranges in Australia.
Another problem facing LG Australia, is that if JB Hi Fi are successful in acquiring The Good Guys who along with Harvey Norman account for the lion’s share of the appliance industry they will face further margin pressure in future negotiations.
